RICHARDSON et al. v. LOREE et al., 94 F. 375

SHELBY, Circuit Judge. The complainants own $6,250 of the bonds of the Teche Railroad & Sugar Company, which are secured by mortgage on the property of the company. In a case pending in the United States circuit court for the Western district of Louisiana, according to the averments of the bill, Yvilliam M. Loree has obtained a decree against the company for $23,648.64, and the Louisiana & Southern States Real-Estate & Mortgage Company, Limited, has obtained a decree for $117,813. These decrees were rendered in the same suit. The complainants in this case were not parties to that suit.

They had no opportunity to defend against the decrees. The decrees were obtained by collusion between the parties to the suit. The company did not owe Loree anything, and had never dealt with him in any way. It had been indebted to the Louisiana & Southern States Real-Estate & Mortgage Company, Limited, but had paid its indebtedness. So that both judgments were unjust, and obtained by fraudulent collusion between the parties, and by an imposition on the court. These statements, for the purpose of considering the demurrer, must be taken as true.

These decrees are made preferred claims, and the effect of them is to render worthless the bonds held by the complainants. It must be regarded as well settled that a stranger to a suit, who, if a judgment therein were given full credit and effect, would be prejudiced in regard to some pre-existing right, is permitted to impeach the judgment. Being neither a party to the action, nor entitled to manage the cause or appeal from the judgment, he is allowed by law to impeach it; otherwise, he would be without remedy. 2 Freem. Judgm. (4th Ed.) §§ 335, 505a, 512; Pacific R. Co. of Mo. v. Missouri Pac. Ry. Co., 111 U.

S. 505, 4 Sup. Ct. 583; Sayre v. Land Co., 73 Ala. 85; Bergman v. Hutcheson, 60 Miss. 872; Carey v. Railway Co., 150 U. S. 171, 14 Sup. Ct. 63; Schuster v. Rader, 13 Colo. 329, 22 Pac. 505; Palmer v. Martindell, 43 N. J. Eq. 90, 10 Atl. 802; Edson v. Cumings, 52 Mich. 52, 17 N. W. 693.

In the printed argument filed by counsel for the appellees it is stated that the demurrer was argued before the circuit court on the theory that this suit was ancillary to the case of Loree against the Teche Railroad & Sugar Company. “That record, however,” counsel adds, “is not before this court now, and, of course, the reasons, referred to do not appear on the face of the transcript as it has been brought to this court.” It is suggested that this court “cannot properly decide this case without that record.” Ho motion is made for a writ of certiorari, for manifestly that could not be granted.

The bill in this case did not make the record in the case of Loree against the Teche Railroad & Sugar Company a part thereof. It only made the decree in that case an exhibit. It is true that the case at bar, for the purposes of the jurisdiction, is ancillary to the case referred to, but in other respects it is an original bill. Upon this question the court, in Pacific R. Co. of Mo. v. Missouri Pac. Ry. Co., 111 U. S. 522, 4 Sup.

Ct. 592, said: “On the question of jurisdiction the suit may be regarded as ancillary to the Ketchum suit, so that the relief asked may be granted by the court which made the decree in that suit, without regard to the citizenship of the present parties, though partaking so far of the nature of an original suit as 1o be subject to the rules in regard to the service of! process which are laid down by Mr. Justice Miller in Pacific R. R. v. Missouri Pac. Ry. Co., 1 McCrary, 647, 3 Fed. 772.

The bill, though an original bill, in the chancery sense of the word, is a continuation of the former suit, on the question of the jurisdiction of the circuit court. Minnesota Co. v. St. Paul Co., 2 Wall. 609, 633.” In Hie case last quoted (Pacific R. Co. of Mo. v. Missouri Pac. Ry. Co., 111 U. S. 505, 4 Sup. Ct. 590), an effort was made to have the court, in deciding a demurrer, refer to records not made a jiart of the bill. The court held that, as the bill charged that the foreclosure decree was obtained by fraud and collusion, — -the facts being stated in the bill, — a demurrer to it must be overruled.

On the question of examining the record in the case in which the alleged fraudulent decree was rendered, the court said: “We are of the opinion tha.t this court cannot consider anything which is not contained in the hill and the exhibits which are annexed to it, and that it cannot look into anything otherwise presented, as the files and records of the Ketchum suit, or of any other proceedings in any court, for the purpose of determining the questions arising on the demurrers to this bill.” The fact that these records were placed before the court on the trial of the demurrer, and cited in the argument, as stated in the briefs filed here, may have unintentionally led the íearned judge who presided in the circuit court to believe that such record was a part of the bill to which the demurrer was addressed; but- the record in that case does not appear in the transcript here, and is no part of the hill in this case.

The allusion to and use of the records in the demurrem cannot change the result, even if the demurrers had, in the writing, referred to them; for it is a fundamental principle of pleading that a, demurrer must be based exclusively upon matter apparent on the face of the bill. The objection must be to matter in the bill, or because of the omission of matter that should be inserted. If the demurrer recites facts not in the bill by way of defense, it is called a “speaking demurrer,” and the new fads cannot be considered. A defendant is not permitted to make up the complainant’s case for him.

If the defendant needs for his defense other facts, he must file either an answer or plea. 1 Beach, Mod. Eq. Prac. § 226: 1 Darnell, Ch. Prac. (2d Am. Ed.) 679, marg. p. 656; 6 Enc. Pl. & Prac. 393. In Stewart v. Masterson, 131 U. S. 151, 9 Sup.

Ct. 682, it was held: “A demurrer to a bill in equity cannot introduce as its support new facts which do not appear on the face of the bill, and which must be set up by plea or answer. * * * Where .there is matter in the bill which is properly pleaded, and is properly ground for equitable relief, and requires an answer or a plea, a demurrer to the whole bill will be overruled.” The decree .of the circuit court is reversed, and the. case is remanded to that court, with directions to overrule the demurrer, with costs, and to take such further proceedings in the suit as shall be proper, and not inconsistent with the opinion of this court.